Market Watch

Deciphering EE’s Shift to ‘Pounds and Pence’ Pricing Model

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The British mobile network operator EE, along with their parent company and prominent internet service provider BT, have recently unveiled a simplified pricing structure. They have gained notoriety as the first major operator to take on this initiative.

This new pricing structure, dubbed ‘pounds and pence’, will provide an accurate reflection of mid-contract price rises for customers. Up until now, customers have been left to decipher these fluctuations based on percentage increases. Additionally, this structure eliminates the use of obscure inflation indices such as the consumer price index (CPI) or retail price index (RPI).

A recent press release highlighted how it will work moving forward. “Starting from 31 March 2025, new and returning mobile customers will witness an annual increase of an additional £1.50 per month.” Connected devices, such as laptops, tablets, and smartwatches, will also see a £1.50 increase per month, while TV and broadband customers will see hikes of £2 and £3 monthly respectively. The pricing for out-of-bundle services will now be exposed to an annual 5% increase.

The broadcast regulatory authority Ofcom had previously recommended, back in December, that inflation-linked mid-contract price rises should be banned. The motive was to provide more transparency to customers viewing their forthcoming bills.

Ofcom’s proposal came into light due to the increasing confusion that customers faced with the metrics used to calculate their prices. A market analysis in 2023 revealed that 40% (or 11 million) of broadband customers and above half of mobile customers (equating to 36 million) were on contracts that had inflation-linked price rises. However, understanding these terms such as CPI and RPI posed an issue, as 55% of broadband customers and 58% of pay-monthly mobile phone customers couldn’t comprehend what CPI and RPI measured.

Melanie Dawes, the CEO of Ofcom, stated during their consultation announcement, “At a time when household finances are under serious strain, customers need prices to be crystal clear.” Her statement underscores the growing need for pricing transparency.

It is widely believed that other UK operators will soon echo this move towards a more simplified pricing structure.

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